Solforex.com - Weekly/Daily Forex Market Analysis

[limyeeshin]

Thursday October 29 2015

Aussie weakens with slow domestic data

The Australian dollar fell in Asia on Thursday after bundle of data released were in slow pace. HIA new home sales fell -4.0% in September from 2.3% gain in previous month. The export price for the third quarter was flat, under expected gain of 0.5%, also the import price only rose 1.4%, below the 1.6% gain expected. AUD/USD changed hands, traded at 0.7106, falling 0.17%.

Japanese yen gains with strong industrial data

The yen was higher in Asia on Thursday after better than expected industrial output data. The figure rose 1.0% in September, far above the expected fall of -0.5% month on month. USD/JPY traded at 120.74, falling 0.29%.

New Zealand remains at its official cash rate

The kiwi fell against U.S. counterpart on late Wednesday ahead of The Reserve Bank of New Zealand’s decision for its official cash rate. It was expected to be unchanged and the pair fell 0.54%, traded at 0.6727. It was yet higher against the Aussie with AUD/NZD falling 0.35% to 1.0593. The RBNZ did not change the overnight official cash rate at 2.75% as expected. They stated that lower interest rates would be required if the exchange rate remains high.

EUR/USD falls sharply to two-month low

The euro fell sharply against greenback on Wednesday slumping to a new 2-month low after the FOMC meeting decided to hold short-term interest rates in October. However, there were hawkish statements from Federal Reserve members giving strong indication that rate hike cards are still in hand for mid-December’s decision. The hawkish stance led the euro slump to lower against the dollar in five of the last seven sessions. EUR/USD traded at 1.0924, falling 1.09%.

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[limyeeshin]

Edition 28｜November 2, 2015​

The euro was weak against the dollar on Friday after Federal Reserve indicated possibility for interest rate hike in December at the FOMC meeting. Data in Eurozone showed slight improvements, consumer price index ticked up to zero after falling 0.1% in September and unemployment rates ticked down to 10.8% in September from 10.9% in previous month. However, the energy costs were still low and the improved data eased pressure on ECB to expand its QE program. The euro was also weak against the yen with EUR/JPY touching lows of 132.26 before settling at 132.69.

The U.S. dollar also fell against other major currencies by investors trying to take profit advances in the wake of a rally. Also later the week, data in U.S. was slowed with disappointing GDP growth rate in the third quarter and shrinkages in prices that shortened the euro’s downward gap against greenback. The prices for consumer spending dropped 0.1%, the first drop since January.

The dollar fell 0.38% in the late trade with 0.23% fall of the week. USD/JPY fell to lows of 120.29 on Friday and GBP/USD gained 0.76% trading at 1.5426. AUD/USD traded at 0.7135, up 0.87% and NZD/USD gained 1.3% to 0.6780.

Bank of Japan lowered its growth and inflation outlook at its monetary policy meeting. It fueled expectations that it might increase monetary stimulus program next month, led the yen bullish. The yen further gained in early Asia on Monday, USD/JPY traded at 120.51, down 0.10%.

Commodity linked Australian and New Zealand dollar were boosted by higher oil prices. New Zealand dollar was higher after data on NZ business confidence showing improvements for second straight month in October. But the Australian dollar fell on Monday early trading ahead of survey release as investors found downtrend data in China that Australia trades are highly related to. The official manufacturing PMI for October in China released on Sunday, showing flat at 49.8, below the 50 level. AUD/USD changed hands at 0.7123, falling 0.19%. In Australia, surveys on manufacturing, inflation and building approval data are to be released on Monday.
In the week ahead, investors will be looking ahead to Central bank announcements in Australia and U.K. Also Friday’s U.S. employment can indicate the strength of the economy for the rate decisions.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Monday, November 2
In Australia, figures on building approvals and surveys on manufacturing and inflation are to be released.
Japan is to release index for PMI manufacturing.
Caixin PMI manufacturing data is to be released in China.
In the Eurozone, PMI manufacturing index are to be published.
The UK is to publish manufacturing data.
In the US, the ISM is to report on manufacturing activity.

Tuesday, November 3
Markets in Japan are shut for its national holiday.
In Australia, Bank of Australia is to hold monetary policy meeting and announce its benchmark rate with monetary statements.
Spain is to release data on movements in employment.
The UK is to publish PMI index for construction.
The US is to release data on factory orders and auto sales.
The ECB governor Mario Draghi is to speak later of the day.

Wednesday, November 4
New Zealand is to release quarterly employment report.
Australia is to release data on retail sales and its trade balance.
In China, Caixin data on service sector is to be published.
Eurozone is to release data on service sector and producer prices.
The UK is to also report on service activity.
The US is to publish ADP report on its employment and its trade balance. Fed Chair Janet Yellen is to testify on bank regulation at the House Financial Services Committee in Washington later the day.

Thursday, November 5
Reserve Bank of Australia governor Glenn Stevens is to speak at an event in Melbourne.
Japan is to release minutes on its recent monetary policy meeting.
Bank of England is to hold monetary policy meeting and announce its benchmark rate with statements. The bank is also to report on its quarterly inflation.
In the US, data on initial jobless claims and preliminary figure on labor costs are to be released.

Friday, November 6
Reserve Bank of Australia is to release minutes on its monetary policy meeting.
Germany is to release data on industrial production.
France is to report on its trade balance.
The UK is to release bundle of data on manufacturing activity, trade balance and industrial production.
Canada is to publish data on movements in employment, unemployment rate and building approvals.
The US is to report on employment and consumer sentiments.

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[limyeeshin]

Thursday November 5 2015 ​

Dollar rises with Yellen’s hawkish statements

The U.S. dollar was boosted broadly against other major currencies after Federal Reserve Chair Janet Yellen’s hawkish comments toward December rate hike at House Financial Services Committee on Wednesday. In testimony before the Committee on Wednesday morning, Yellen implied improvement in the U.S. economy amid solid increases in domestic spending and fading of global economy slowdown. The FOMC also expects long-term inflation to move toward its target goal of 2% as low energy prices settle. Greenback itself rose up to +0.98% after Yellen’s comments and settled at +0.78%.

EUR/USD dips to 3 month low

The euro dropped sharply against the dollar reaching its lowest in three months after Yellen’s statements. The European Central Bank Governor Draghi also commented on likelihood of Eurozone’s QE program extension, mentioning policymakers would re-examine the degree of monetary stimulus program, further dropped the euro. The euro fell 0.98% against the dollar, traded lowest at 1.0844 and settled at 1.0863.

Sterling shortens gains after hawkish FOMC stance

The British pound edged higher against greenback after the data on U.K. service sector rebounded from its previous month. U.K. services purchasing managers index reached 54.6 in October from its 2 years low of 53.3 in September, also above 45.5 expected. GBP/USD gained highs of 1.5445. Also EUR/GBP went down 0.4% at 0.7079 after the data. But GBP/USD pair changed hands after Yellen’s hawkish comments on rate hike, by falling 0.24%. It was yet limited fall ahead of BoE monetary policy meeting.

USD/JPY gains with rate hike cards

Japanese yen also dropped against the dollar after FOMC’s increased expectation of interest rate rise in December. USD/JPY gained 0.41%, traded at 121.37 before settling at 121.18. Investors are looking ahead to U.S. nonfarm payrolls on Friday for indication of rate hike in December.

Market Movements

Emerging markets and commodity linked currencies were generally low against the dollar after Yellen’s comments on hawkish stance of FOMC. Norway Crone fell 1.76%, Russian Ruble fell 0.80%, South African Rand dropped 1.76%, New Zealand dollar fell 1.23% and Australian dollar dropped down 0.64%.

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[limyeeshin]

Edition 29｜November 9, 2015​

The U.S. dollar was boosted against other major currencies after robust U.S. jobs report on Friday showing strong figures than expected, reinforcing expectation for December rate hike by Federal Reserve. The U.S. economy added 271,000 jobs last month, far above the 180,000 jobs expected, showing greatest increase within the year. Unemployment rate also fell to 5.0% which is lowest rate in seven years. The solid jobs data increased the possibility for the Federal Reserve to raise interest rates next month, which would make the dollar more yield return investment. Greenback’s strength was up 1.23% in late trade, strongest level since April with week gains of 2.31%.

The euro fell against the dollar after increased possibility of rate hike by Federal Reserve supported by solid economy data. Earlier the week, the euro showed strength after ECB policy member and Austria Central Bank Governor Nowotny mentioning that additional asset purchasing program needs further circumspection. But after Fed Chair Yellen’s statement that stronger upcoming U.S economy data will support rate hike execution followed by the strong jobs data on Friday, turn the euro bearish. EUR/USD fell 1.31%, hit 1.0708 before settling at 1.0740. The pair fell 2.43% for the week.

The Australian dollar fell in Asia after slowed China’s weekend trade data. China trade surplus came in at $61.64 billion, slightly above $60.34 billion in September, but exports fell 6.9% and imports collapsed 18.8%. The surplus was due to steep drop in imports rather than stronger exports and therefore was not interpreted well in terms of trade improvements. AUD/USD traded at 0.7028, down 0.23% as the Aussies are closely related to China’s trade economy.

Japanese yen also fell against the dollar despite upbeat wages data due to stronger expectation of Fed’s rate hike. Japan average cash earnings for September rose 0.6%, better than 0.5% gains expected. Yet, USD/JPY traded at 123.45, up 0.24%.

Overall week pairs review
GBP/USD -2.47%, traded at 1.5047
AUD/USD -1.28%, traded at 0.7046
USD/CAD +1.76%, at 1.3306
USD/JPY +2.09, at 123.13
EUR/JPY -0.29%, at 132.35
AUD/JPY +0.67%, at 88.62

In the week ahead, investors will be looking ahead to China’s inflation and industrial production data for determining easement of China-led global economy slowdown. Also, U.S. data on retail sales, producer prices and consumer sentiments will indicate likelihood of rate hike next month. Eurozone’s preliminary data on GDP is to be also closely watched.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Monday, November 9
Japan is to release data on average cash earnings.
Germany is to publish data on trade balance.
In the Eurozone, Sentix is to report on investment sentiment.
Canada is to release figures housing starts.
The US is to produce labor market condition index and OECD composite leading indicator.

Tuesday, November 10
Japan is to release data on current account.
Australia is to publish data on NAB business confidence and data on home loan.
China is to release data on producer and consumer price inflation followed by data on initial loans.
Reserve Bank of New Zealand is to publish bi-yearly national financial stability report.
In the Eurozone, the finance ministers are to hold monetary policy meeting in Brussels.

Wednesday, November 11
In Australia, Westpac is to produce data on consumer sentiment.
China is to release data on industrial production, fixed asset investment and retail sales.
Germany is to publish data on wholesale prices.
The UK is to release monthly employment data on average wages, initial unemployment claims and unemployment rate.
Bank of England Governor Mark Caney is to hold a press conference after the data released commenting on quarterly inflation.
In the Eurozone, European Central Bank Governor Mario Draghi is to speak at an event in London.

Thursday, November 12
Japan is to release data on core machinery orders and producer price inflation.
Australia is to report on employment with figures of movement in employment and unemployment rate.
Germany and France is to release data on consumer prices inflation.
In the Eurozone, data on industrial production is to be published.
In the US, data on initial jobless claims is to be released followed by Fed Chair Yellen and Fed members’ statements.

Friday, November 13
Japan is to release data on industrial production.
In the Eurozone, data on trade balance and preliminary data on GDP growth is to be published.
The US is to publish data on producer prices, retail sales and consumer sentiments.

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[limyeeshin]

Edition 30｜November 16, 2015​

The U.S. dollar rose against other major currencies with grown expectations for rate hike by Federal Reserve next month as well as investors avoiding risky asset investments. Last week, the U.S’s solid employment data and declining trend of China’s trade balance pushed the dollar up but it shortened the gains in late trades from profit advancing arbitrage trades. But the hawkish statements from Federal members spurred investors’ expectation for rate hike in December, supported the dollar bullish. The dollar itself rose 0.33% in late trade.

Japanese yen was strengthened on Monday after disappointing third quarter GDP growth that emphasized on the lack of price pressure with an awash in liquidity. The third quarter preliminary data of GDP growth declined 0.2%, compared to 0.1% fall expected, while the yearly pace also slumped 0.8%, further down expected drop of 0.2%. USD/JPY changed hands at 123.37, dropping 0.19%. The Bank of Japan’s monetary policy meeting announcements will be in focus for further outlook.
In New Zealand, NZD/USD pair dropped despite the retail sales data in New Zealand for the third quarter rose 1.6%, above the 1.3% expected gain. The pair traded at 0.6529, falling 0.15% after the data released. AUD/USD also changed hands at 0.7104, down 0.36%.

The euro was also lower with continued expectation of Federal Reserve’s rate hike in next month. On Thursday, Fed Vice-Chair Stanley Fischer said that it may be appropriate for the Federal Reserve to initiate raising rate in December, supporting the dollar strengthening. EUR/USD pair dropped 0.39%, traded at 1.0773 in late trade.

In the week ahead, investors are looking ahead to monetary policy statements from G20 summit. The dollar’s bullish movements could be limited if the concerns on China’s economy being mitigated from the comments.

Upcoming U.S. data on manufacturing is expected to improve, may consolidate the expectations for rate hike by Fed next month.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Monday, November 16
Japan is to release preliminary data on GDP growth for the third quarter.
Australia is to release data on auto sales.
In the Eurozone, revised consumer price index is due and the European Central Bank Governor Mario Draghi is to speak at an event in Madrid.
In Germany, Buba monthly report is to be published.
Canada is to release data on manufacturing sales and foreign investment.
In the US, data on NY state manufacturing is to be published.

Tuesday, November 17
Australia is to release the minutes of its recent monetary policy meeting.
New Zealand is to release data on inflation expectations.
In the UK, bundle of data on consumer and producer price inflation, retail sales and housing prices are to be released.
In the Eurozone, ZEW is to report on economic sentiment.
The US is to release data on consumer price inflation, industrial production and housing market index.

Wednesday, November 18
In Australia, RBA vice governor Guy Debelle is to speak at an event. Also, CB composite leading index and wage index are to be published.
China is to release data on housing prices.
In the US, the NY fed President William Dudley and Atlanta Fed Dennis Lockhart is to speak at an event. Also, the FOMC meeting minutes are to be in focus for indication of further decision of rate hike by Federal Reserve.

Thursday, November 19
Japan is to release data on trade balance and release minutes on its recent monetary policy meeting.
The UK is to publish data on retail sales.
The European Central Bank is to publish the minutes on its latest meeting.
Canada is to release data on wholesale sales.
In the US, data on initial jobless claims and composite leading indicator are due.

Friday, November 20
Japan is to publish Bank of Japan’s monthly report.
Germany is to release data on producer price inflation.
In the Eurozone, the ECB governor Mario Draghi is to speak at an event in Frankfurt.
Also, Eurozone’s data on consumer sentiment is due later the day.
Canada is to release data on consumer price inflation and retail sales.


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[limyeeshin]

SOLFOREX WEEKLY HOT ISSUES
Thursday 19 November 2015​

The dollar slightly drops after Fed minute release

The U.S. dollar slightly dropped after less hawkish than expected minutes of FOMC meeting. In early trades, the dollar kept bullish ahead of the minute release. The NY state fed president William Dudley said it is not a surprise thing to raise the interest rate. Cleveland state fed President Loretta Mester also added that current economic data can handle 25bp increase in rate. The hawkish statements by Federal Reserve members once brought the dollar index up to 99.82. But the minutes showed less hawkish comments by the Fed members with less certainty on rate hike next month and indications that it could be slowly proceeded. The dollar turned slightly lower and fell 0.04% after the minutes. EUR/USD hit 1.0623 and settled at 1.0659, down 0.08%.

Yen gains slightly ahead of BOJ announcement

The Japanese yen was lower against the dollar despite the dollar index’s fall after FOMC meeting minute release. Recent two straight quarterly declines with slowed economy brought investors’ expectations that it will be likely that dovish comments will be made by Bank of Japan. However, the yen gained in Asia on Thursday early trading after the trade balance showing surplus. The trade balance in Japan widened to a ¥112 billion surplus in October which is the first positive figure in seven months. Imports fell 13.4% while exports fell 2.1%. USD/JPY changed hands at 123.51, falling 0.10%.

Market movements

The emerging market and commodity market currencies were once bearish when the oil price hit below 40$ but the eased comments than expected by Federal Reserve meeting minutes turned the currencies bullish. GBP/USD gained 0.16% in relation to the greenback’s drop. South African rand gained 0.7%, Norway crone gained 0.17%, Russian ruble rose 0.28% and Brazilian real rose 1.18%. New Zealand dollar and Australian dollar slightly fell, by NZD falling 0.09% and AUD falling 0.15%.

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[limyeeshin]

Edition 31｜November 24, 2015​

The euro turned lower against the dollar last week with increased possibility of additional asset purchasing and the impact from terrorist attack in Paris. The single currency found some support with Eurozone’s composite purchasing index slightly rising from 53.9 to 54.4 and accelerated Germany’s private sector hitting three months high. But growth in France’s private sector fell to lowest level in three months especially the service sector declined steep from the terror incident.
On Friday, European Central Bank Governor Mario Draghi gave clear indication that ECB is ready to act on inflation boost in the Eurozone. The euro remained under pressure with increased expectations of quantitative easing program execution in December. EUR/USD pair hit seven month lows on Monday before paring the losses late in the session, settled at 1.0636, down 0.28%.

The U.S. dollar remained bullish broadly against other major currencies with strong expectation of rate hike next month. The currency stayed higher despite disappointing housing data with support from expectations of Federal Reserve’s rate hike in December. The existing home sales fell 3.4% to 5.36 million units from 5.55 million in September, falling further than expected fall of 2.3%. NY State Fed President William Dudley said on Friday that there is a strong case for raising interest rates in next month’s central bank meeting as economic data continues to improve. USD/JPY gained 0.12% at 123.16, AUD/USD fell 0.64% to 0.7193, USD/CHF gained 0.13% at 1.0201 and GBP/USD pair fell 0.18% to 1.5158.

The New Zealand dollar declined against its U.S. counterpart on Monday with increased expectations for U.S rate hike. NZD/USD fell to 0.6502 in Asian late trade, lowest level in a week. The pair settled at 0.6205, falling 0.93%.

In the week ahead, investors will be looking ahead to U.S and U.K’s revised GDP for the third quarter. The U.S. market will be closed on Thursday and half of Friday due to Thanksgiving holiday.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Tuesday, November 24
Japan is to release data on PMI manufacturing sector.
Germany is to publish revised data on third quarter GDP growth and IFO institute is to report on business climate.
The Reserve Bank of Australia Governor Glenn Stevens is to speak at an event.
In the U.S., the third quarter revised GDP is due and also Case-Shiller housing price index and data on consumer sentiment are to be published.

Wednesday, November 25
The Bank of Japan is to release its minutes on recent monetary policy meeting and announce its benchmark rate and rate statements.
The U.S. is to release bundle of data on durable goods order, initial jobless claims, personal income and expenses, housing prices and sales and PMI service sector.
New Zealand is to publish data on its trade balance.

Thursday, November 26
Australia is to release data on private capital spending.
The U.S. markets are closed for Thanksgiving holiday.

Friday, November 27
The U.S. markets are closing early for its Black Friday.
Japan is to release data on household spending, consumer price inflation and unemployment rate.
The U.K. is to publish GFK’s consumer sentiment index.
Germany is to release data on import prices.

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[limyeeshin]

Thursday 26 November 2015​

The euro falls with increased possibility for additional asset buying

The euro fell after the European Central Bank Vice president stating that negative rates in some European countries does not act adversely to the economy. It indicated some investors that it might bring down the rates further at next ECB monetary policy meeting. Thus the euro fell and the dollar was strengthened as a return. The arbitrage trades were inserted once the dollar index hit 100.0 and the euro slightly shortened its loss. EUR/USD fell 0.23%, settled at 1.0610.

The dollar goes higher broadly despite lower PCE prices

The dollar was bullish against other major currencies ahead of Thanksgiving holiday with bundle of mixed data. The core data PCE prices flat at 0.0%, below 0.2% expected which eased the rate hike expectation. But the durable goods order rose 3.0%, above expectation of 1.5% and also the personal income was higher at 0.4%, more than previous month’s rise at 0.2% that supported the PCE drop impact for the rate hike and kept the dollar being bullish. USD/JPY rose 0.15% to 122.62.

The pound rises after adjustment of the growth rate

The British pound rose against the dollar after the Chancellor of the Exchequer George Osborne announced after the budget review that the finance of the government is improved and thus it will withdraw the tax reduction. The GDP growth rate for 2016 was also adjusted from 2.3% to 2.4% indicating improvement of the economy. It indicated investors that the central bank will move up the rate hike decision and led the pound bullish. GBP/USD rose 0.23% after the announcement.

Market movements

The emerging market and commodity market currencies showed fluctuation after the dollar index hitting 100.0. Investors found the ECB’s quantitative easing may vary the asset movements to according currencies. The South African rand fell 0.70%, Turkish lira fell 0.38% and Russian ruble was down 0.11%. But the commodity currencies rose, with New Zealand dollar gaining 0.39%, Australian dollar up 0.15% and the Canadian dollar gained 0.06%.

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[limyeeshin]

Edition 32｜November 30, 2015​

The euro turned lower against the dollar last week with the possibility for Swiss Central bank to lower the rates. The investors found the Eurozone might also lower rates supported by the European Central Bank (ECB) Vice President saying negative interest rates will not affect financial market adversely. The ECB President Mario Draghi also has been indicating that the central bank could increase the size of its monthly quantitative easing program next month. The euro slumped to the dollar by 0.17%, EUR/USD traded at 1.0593 not far from Wednesday’s seven-month lowest of 1.0565.

The dollar was bullish broadly against major currencies as the demand for greenback still rising with confident expectation of rate hike next month by the Federal Reserve. Beginning of last week dollar fell slightly after the revised U.S. GDP was upward adjusted by 2.1% but in decreasing trend except stock sector. Also, after Turkey jet downing Russian fighter bomber the safe asset preference was increased and supported the dollar strengthening. Trading volumes were thin on Friday as the market was closed early for its black Friday after being closed Thursday for Thanksgiving. On Friday, the dollar rose 0.19% broadly at 100.15, highest index since March.

Japanese yen was steady stronger in Asia on Monday after the boosted retail sales data. In Japan, the industrial production for October rose 1.4%, below the expected rise of 1.9% but the retail sales offset the slower industrial production by jumping 1.8%, much higher than 0.8% increase expected. USD/JPY changed hands at 122.75, falling 0.04% in early trading on Monday.

In Australia, the MI inflation gauge showed reading of 0.1%. Australia is about to release bundle of data. HIA new home sales, business inventories for the third quarter, company gross operating profit and housing and private sector credit are due and expected to rise steadily. AUD/USD traded at 0.7188 in early trading.
New Zealand business confidence for November came in at 14.6%, slight below 15% expec
ted but well improved from previous month’s 10.5%.

Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.

Monday, November 30
Japan is to release data on retail sales and industrial production.
Australia is to publish bundle of data on new home sales and company operating profits and more.
New Zealand is to release a report on business confidence.
Japan is to release data on construction orders and housing starts.
Germany is to publish data on retail sales and consumer price inflation.
The U.S is to release data on Chicago state PMI, pending home sales and Dallas manufacturing

Tuesday, December 1
China is to release data on PMI manufacturing and service sector followed by Caixin PMI manufacturing and service report.
Japan is to release data on PMI manufacturing sector.
The Reserve Bank of Australia is to hold monetary policy meeting and announce its benchmark rate and give rate statements.
The Eurozone and Germany is to release data on PMI manufacturing sector, movements in employment and unemployment rate.
Canada is to publish monthly GDP growth report.
In the U.S., bundle of data on auto sales, PMI manufacturing, ISM manufacturing report and construction expenses are due.

Wednesday, December 2
In Australia, the Reserve Bank of Australia Governor Glenn Stevens is to speak at the Australia-Israel Chamber of Commerce breakfast, in Perth.
Australia is to publish data on third quarter gross GDP.
The U.K. is to release survey data on construction activity.
The Eurozone is to publish preliminary data on producer and consumer price inflation.
The U.S. is to publish report on private sector jobs creation.
Also, the Fed Chair Janet Yellen is to speak at the Economic Club of Washington D.C.
Canada is to hold monetary policy meeting and announce its benchmark rate and give rate statements.

Thursday, December 3
Australia is to release data on its trade balance.
In the Eurozone, the Eurozone, Germany and France are to release data on PMI service sector. The U.K. is also to publish data on PMI service sector.
Also, the Eurozone’s retail sales data are due.
European Central Bank is to hold monetary policy meeting and announce the rates followed by press conference with the ECB President Mario Draghi.
The U.S is to release bundle of data on initial jobless claims, PMI service sector, factory order and ISM non-manufacturing sector.
Federal Reserve Chair Janet Yellen is to speak on monetary policy before the Joint Economic Committee in Washington D.C.

Friday, December 4
Australia is to release data on retail sales.
Japan is to publish data on consumer sentiment.
Germany is to release data on factory orders.
Eurozone is to publish data on PMI retail sector.
Canada it so release data on employment with unemployment rate and publish its trade balance.
The U.S. is to release data on its trade balance and round up the week with the ADP non-farm payroll report.

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[limyeeshin]

Thursday 03 December 2015

The dollar rises with improved labor data

The U.S. dollar was stronger against other major currencies after solid ADP non-farm payroll data. ADP Research Institute reported that U.S. private employers added 217,000 jobs in November from 182,000 in October, much above 183,000 expected. Also the unemployment rate ticked down to 5.0% as expected. The Fed Chair Janet Yellen’s statements that implied more certainty toward rate hike in December supported the dollar strengthening and the greenback reached over 100.5 at a point. However the beige book only hinted the economy is improving and the manufacturing shrinkage due to bullish dollar burdened the investors and shortened the dollar’s gains. The dollar itself rose 0.19% in late trading.

The euro falls ahead of ECB’s monetary policy statements

The euro fell against the dollar ahead of the European Central Bank’s monetary policy meeting with increased expectation of ECB to ramp up a comprehensive 1.1 trillion euro asset buying program. Investors also widely expects that ECB will cut down its benchmark refinancing rate from a record-low of 0.05% and also decrease further the deposit rate that is already negative at -0.20%. EUR/USD settled trading at 1.0617, down 0.09% in late session. The euro fell against the dollar by 3.5% over last month and 12% for the year.

The pound falls with stronger U.S. employment data

The British pound was also impacted from the dollar index strengthening with solid U.S. employment data and Yellen’s hawkish statements. Also, the increased expectation toward ECB’s monetary policy for QE program increased the pound’s loss. The pound shortened its loss as the dollar index lessened its gains after Yellen’s Q&A with less affirming comments. GBP/USD fell 0.92%, traded at 1.5055.

Aussie falls after disappointing trade data for October

The Australian dollar fell after the trade data showing wider gap than expected for October. Australia reported the trade balance showed a deficit of A$3.305 billion, way below the expected deficit of A$2.665 billion. Also, the New Home Sales for October fell 3.0%, and the AIC Services fell to 48.2 in November from 48.9 in October. The disappointing figure depreciated the aussie, AUD/USD traded at 0.7287, falling 0.32%.

Market Movements

Major pair movements
EUR/USD -0.17%
JPY/USD -0.30%
GBP/USD -0.92%
Commodity linked currencies were generally weakened due to commodity price drop. Norway crone fell 0.44%, New Zealand dollar fell 0.61%, Russian dollar fell 1.20% and the Australian dollar fell 0.29%. Other emerging market currencies were higher, with South African rand gaining 0.48% and Brazilian real gaining 0.51%.

(Mia Chung)
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